Tech Law Journal
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Oct. 27, 2000
8:00 AM ET.
Alert No. 51.

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News Briefs

10/26. The House and Senate remain in session. Several major tax and appropriations bills, which may serve as vehicles for passage of technology related provisions, are still under consideration.
10/26. The House passed HR 2614, a large tax package that includes, among other things, the Foreign Sales Corporation bill. The current FSC tax regime, and the replacement language contained in HR 2614, benefit high tech companies that sell goods and services abroad. The WTO recently held that the current FSC tax regime constitutes an illegal export subsidy. Passage of the replacement language would, at least temporarily, avert a potential trade war with the EU, in which the EU might target for retaliation major U.S. tech exporters, such as Microsoft and Intel. There is little debate in the U.S. over whether the FSC bill should be passed. However, the underlying tax bill to which it is attached is being delayed by pre-election posturing and publicity seeking. HR 2614 passed on a largely partisan vote of 237 to 174. 203 Republicans and 33 Democrats voted in favor. See, Roll Call No. 560. The White House press office released a statement that said that Bill Clinton will veto the bill. "As the President made clear today, the majority in Congress put forward a partisan legislative tax proposal ... If H.R. 2614 reaches his desk, he will be forced to veto it." Earlier in the day, Bill Clinton sent a letter to House Speaker Denny Hastert (R-IL) and Senate Majority Leader Trent Lott (R-MS) about the tax bill. He stated that "While we have already reached substantial agreement in important areas, such as replacement of the Foreign Sales Corporations regime, your legislation has substantial flaws in several key areas." The bill also contains a variety of tax cuts, raises the minimum wage by $1, and restores Medicare cuts for health care providers. The Senate has debated, but not yet voted on, this bill.
10/26. The House passed HR 4942, an appropriations bill which contains funding for the Commerce, Justice, and State (CJS) departments. This bill includes USPTO funding. At issue is how much of the fees collected by the USPTO will be diverted to pay for other government programs. USPTO Director Todd Dickinson stated in a speech on Friday, Oct. 20, that the USPTO needs all of the fees that it collects to conduct its operations. Opponents of the diversion call it a "tax on innovation." The bill also contains a provision limiting the FCC's authority to grant low power FM licenses. The measure is supported by members of the House Commerce Committee, the National Association of Broadcasters, and National Public Radio. The bill also contains a Social Security number privacy protection provision; however, some privacy groups oppose the measure for being "riddled with loopholes and exceptions." See, opposition letter. The bill passed on a partisan vote of 206 to 198. See, Roll Call No. 562. Bill Clinton wrote a letter to House Speaker Denny Hastert (R-IL) and Senate Majority Leader Trent Lott (R-MS) stating that he will veto the bill. The Senate has not yet passed the bill.
10/26. Neither the House nor the Senate have passed the Labor, Health and Human Services, and Education appropriations bill. This bill may include a provision mandating the use of porn filtering technology by schools and libraries that receive e-rate subsidies. Opponents, including the ALA and ACLU, continue to lobby against the measure. Supporters are confident that it will remain in the bill when passed.
10/26. The U.S. Court of Appeals (DCCir) released an Notice [PDF] in the Microsoft antitrust appeal in which it stated: "Upon consideration of the parties' responses to the Court's October 18, 2000, Notice, the Court has decided not to proceed with the review session described in that Notice." On Oct. 18 the Court issued a notice requesting the parties to respond to its proposal that Michael Hites, CTO of the Illinois Institute of Technology, conduct a review session on the "fundamentals of automation". On Oct. 25 the DOJ filed a Response in which it sought to limit Hites' role. Microsoft filed a Response in which it pointed out that Hite has ties to Microsoft adversary Sun Microsystems.
10/26. The FTC released its long awaited report on its June 29-30 workshop on electronic B2Bs and antitrust law enforcement. Susan DeSanti, the FTC's lead person on B2Bs, and David Balto, also of the FTC, will participate in a panel on this topic at 8:30 AM on Friday, Oct. 27, at the U.S. Capitol. The report is published in the FTC web site as 7 separate PDF documents.
Table of Contents
Introduction and Executive Summary
Overview of B2B Electronic Marketplaces
Efficiencies of B2B Electronic Marketplaces
Antitrust Analysis of B2Bs
Appendix A: Workshop Panelists
Appendix B: Written Statements
See also, FTC release.
10/26. FCC Chairman Wm. Kennard released a statement regarding AT&T's restructuring plan. He said: " Over 60 million American consumers rely on AT&T's long distance phone service. The Commission has the authority and the responsibility to ensure that this restructuring does not adversely impact the quality of consumer service, competition in the telecommunications markets, and the integrity of the telecommunications network. I will continue to closely question the company about today's announcement and will insist that consumers' interests are protected." On Oct. 25, AT&T announced that it would form four separate publicly traded companies: AT&T Broadband (cable TV and broadband services company), AT&T Wireless, AT&T Business, and AT&T Consumer. See, AT&T release. Meanwhile, MCI WorldCom CEO Bernie Ebbers indicated that his company may restructure also. He stated that "we have intensified our efforts to become a more business-focused communications company. Our planning efforts to restructure our company into a data and Internet focused, high-growth business and a voice-based, high cash flow business are substantially complete. We look forward to communicating the details of this exciting new strategy on November 1, 2000." See, release.
10/26. SBC filed 271 petitions with the FCC to provide long distance service in Kansas and Oklahoma. Both the Kansas Corporation Commission (KCC) and the Oklahoma Corporation Commission (OCC) support the requests. The FCC has already approved SBC's request to provide long distance service in Texas. See, SBC release and USTA release.
10/26. The FTC held the first of two sessions of a two day public symposium to examine warranty protection for software and other high-tech goods and services marketed to consumers. The symposium continues on Friday, Oct. 27 at 8:30 AM at the FTC, 600 Pennsylvania Avenue, NW, Washington DC. See, FTC release.
10/26. Bill Clinton announced his intent to nominate Isaac Hunt as a SEC Commissioner. He has been a SEC Commissioner since Feb. 1996. See, WH release.
Editor's Note: This column includes all News Briefs added to Tech Law Journal since the last Daily E-Mail Alert. The dates indicate when the event occurred, not the date of posting to Tech Law Journal.
Breaking News

The Wall Street Journal reports on Dec. 27 that "Microsoft Corp. and U.S. authorities are investigating an extraordinary computer break-in at Microsoft's headquarters by hackers believed to have stolen the blueprints to its most valuable software ..." See, full story.
New Documents

FTC: report on B2Bs and antitrust law, 10/26 (PDF, FTC)
Table of Contents
Introduction and Executive Summary
Overview of B2B Electronic Marketplaces
Efficiencies of B2B Electronic Marketplaces
Antitrust Analysis of B2Bs
Appendix A: Workshop Panelists
Appendix B: Written Statements
USCA: Notice cancelling technology review session for the Court of Appeals in the Microsoft case, 10/26 (PDF, USCA).
New and Updated Sections

Calendar (updated daily).
News from Around the Web (updated daily).
Quote of the Day

"B2Bs can offer tremendous efficiencies. They can help reduce administrative costs, cut search costs, open new markets, check unmonitored corporate spending, aid efficient joint purchasing, facilitate supply chain management, and facilitate efficient collaborations for such projects as joint product design, among other things. B2Bs may also raise a wide variety of antitrust issues, depending on their structure, bylaws, operating rules, contracts with participants, ownership and management, the characteristics of the markets in which they operate and that they may affect, and other factors. Workshop panelists reported, however, that the antitrust concerns that B2Bs may raise are not new and agreed that B2Bs are amenable to traditional antitrust analysis."

Federal Trade Commission, from report titled "Entering the 21st Century: Competition Policy in the World of B2B Electronic Marketplaces: A Report by Federal Trade Commission Staff," at Part 3, page 1.